First Look: The Second Annual New Intelligent Enterprise Survey

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1 SUMMER 211 VOL.52 NO.4 Nina Kruschwitz and Rebecca Shockley First Look: The Second Annual New Intelligent Enterprise Survey REPRINT NUMBER 52413

2 THE NEW INTELLIGENT ENTERPRISE First Look: The Second Annual New Intelligent Enterprise Survey How are organizations using analytics? Can people access the data they need? Here are a few highlights from our newest survey. BY NINA KRUSCHWITZ AND REBECCA SHOCKLEY THIS IS THE SECOND YEAR that MIT Sloan Management Review has teamed up with the IBM Institute for Business Value in a project we call The New Intelligent Enterprise. Our inquiry into how organizations are turning analytics into competitive advantage comprised conducting a survey of more than 4, executives, managers and analysts from around the world and from a wide range of industries. The results of our second annual survey are now in and we ve begun analyzing the data. The charts in this preview represent the answers to just eight of the survey s 27 questions, presented as simple raw data. By the time the full report on the survey is published this fall, the information these charts hold will be combined and refined, and, in many cases, compared with last year s responses to give you a snapshot of what s changed since our 21 survey. But even without that, these initial charts will allow you to do some immediate benchmarking and see how your organization is doing in relation to your peers. A few things stand out on these pages. While last year s respondents said their top business objective was innovating to achieve competitive differentiation, this year it s growing revenue. Organizations are also looking at analytics as a tool for strategic decision making, not just for tactical choices and activities. That could affect every part of the organization in some very interesting and unexpected ways. ACCESS TO DATA NEEDS IMPROVEMENT Only about four in 1 respondents have access to the information they want either to a great or completely. The majority are less satisfied with their information access and almost one-fifth either have limited or no access to the data they need to succeed in their jobs. Make real-time decisions Improve resource allocations Reduce enterprise costs Increase customer understanding Increase employee productivity Accelerate development of new products/services Identify new markets Manage enterprise risk exposures Foster collaborative decision making Increase enterprise/operational visibility Improve supply chain performance To a limited To some Not at all Completely 1% 8% 18% ANALYTICS USED FOR STRATEGIC DECISION MAKING The top three objectives organizations cited for using analytics are difficult to measure, but they align with organizations primary business objectives, suggesting that people are starting to recognize the value of using analytics for strategic decision making. 4% 33% 26% 27% To a great To what do you have sufficient access to the information and analytics needed to do your job successfully? 28% 3% What are your organization s primary objectives for leveraging analytics? 1% 3% SLOANREVIEW.MIT.EDU SUMMER 211 MIT SLOAN MANAGEMENT REVIEW 87

3 THE NEW INTELLIGENT ENTERPRISE CONSISTENCY IS KEY Organizations are concerned that the quality of the data they use in decision making is consistent. It may be more important to have uniformly consistent data quality across the organization, rather than perfect data from one business unit and poor quality data from another. Consistency in the quality of the data 44% More timely data More relevant data 3% Better data collection methods Clarity about the source of the data Which data characteristics would help you gain more More granular or precise data confidence with the data you use to make decisions? Data from more external sources Traceability of data through all points of integration Data from unstructured sources (e.g. , logs, Internet, text documents) Clear ownership of the data Data from more internal sources 12% An authoritative single view of a data domain (e.g., a customer, a product, a supplier) More secure data 4% I am not provided with data to support my decisions 2% MUST LEADERS WALK THE TALK? Survey respondents want leaders to practice what they preach. If the organization s leaders make fact-based decisions themselves, in service of the organization s long-term vision, and demonstrate a willingness to share data across silos, will the rest of the organization be more willing to do the same? Fact-based decision making 38% Understanding of the long-term vision for the organization Sharing of data across traditional silos 29% Distributed decision making 23% Broad access to data and insights What are the most important behaviors Articulation of the value of analytics business leaders should advance to Evaluation of data for its enterprisewide implications increase the 18% effectiveness of Reward and promote successful projects analytics use within your organization? Invest in education and training Bias toward experimentation 1% 3% 1% 3% 4% ORGANIZATIONS UNSURE HOW TO USE ANALYTICS Organizations continue to struggle to understand how to use analytics to improve the business and to find the time to figure it out. Many of the challenges relate to organizational politics such as who owns the data and who has access to it. Lack of understanding of how to use analytics to improve the business 3% Lack of management bandwidth to focus on analytics due to competing priorities Lack of skills to interpret and leverage the data Lack of skills required to analyze the data Political or power-based constraints within organization Lack of process ownership Lack of executive sponsorship Unwillingness to share data internally What cultural/ Perceived costs outweigh the projected benefits organizational challenges inhibit Information governance is ineffective the use of analytics? Ineffective individual incentives 1% Unwillingness to accept data sourced from other internal or external collection methods 7% 1% 3% 88 MIT SLOAN MANAGEMENT REVIEW SUMMER 211 SLOANREVIEW.MIT.EDU

4 IT S NOT EASY INTEGRATING DATA The top two challenges that organizations have in using analytics effectively are reminiscent of the challenges that companies have always cited for using business information. Integration is never an easy task, and as organizations take on bigger, bolder goals, the complexity can be overwhelming. Difficulty in integrating internal data across silos 26% Too time-consuming or costly to perform all the analytics desired 25% Difficulty in extracting and/or using information from unstructured sources 22% What technology Lack of right information to analyze challenges inhibit your organization from using Lack of access to quality/trusted data analytics effectively? Legacy infrastructure with complex applications that inhibit data collection and analysis Lack of software/tools to turn data into actionable insights Lack of software/tools that allow end users to perform analytics themselves Lack of software/tools to analyze unstructured information 16% Lack of software/tools that allow end users to consume analytics themselves 16% Analytics are outdated by the time they reach someone who can act 9% 1% 3% PRIMARY BUSINESS OBJECTIVES HAVE NOT CHANGED While the top three business objectives remain the same this year compared with last, their order has changed. In 21, innovating to achieve competitive differentiation was number one; this year it s growing revenue. There also seems to be a new focus on expansion: Penetrating new markets and acquiring new customers are getting more attention than squeezing more out of what you already have (such as workforce performance or operating speed). TECHNOLOGY IS NOT THE PROBLEM Respondents believe that organizational or cultural challenges are almost twice as hard to solve as technological issues. That suggests that leaders have their work cut out for them and underscores the need for leaders to practice what they preach before the organization is able to use analytics most effectively. Please rate the level of difficulty in overcoming analytic inhibitors in your organization Growing revenue 28% Reducing costs and increasing efficiencies 27% Innovating to achieve competitive differentiation Growing profits Penetrating new markets/geographies Profitably acquiring and retaining customers Increasing workforce performance 13% Increasing operating speed and adaptability What are your organization s 13% primary business objectives Increasing return on invested capital for the next two years? 9% Better managing enterprise risk 8% Increase social and environmental responsibility 6% Addressing regulatory compliance 6% 1% Organizational Inhibitors Technical Inhibitors Easily Resolved Not Resolvable % 16% 36% 4% 4% % 8% 32% 36% 22% 2% Nina Kruschwitz is MIT Sloan Management Review s managing editor and special projects manager. Rebecca Shockley is the business analytics and optimization and global lead for the IBM Institute for Business Value. Comment on this article at edu/x/52413, or contact the authors at mit.edu. 4% 6% 8% 1% Reprint Copyright Massachusetts Institute of Technology, 211. All rights reserved. SLOANREVIEW.MIT.EDU SUMMER 211 MIT SLOAN MANAGEMENT REVIEW 89

5 PDFs Permission to Copy Back Issues Reprints Articles published in MIT Sloan Management Review are copyrighted by the Massachusetts Institute of Technology unless otherwise specified at the end of an article. MIT Sloan Management Review articles, permissions, and back issues can be purchased on our Web site: or you may order through our Business Service Center (9 a.m.-7 p.m. ET) at the phone numbers listed below. Paper reprints are available in quantities of 25 or more. To reproduce or transmit one or more MIT Sloan Management Review articles by electronic or mechanical means (including photocopying or archiving in any information storage or retrieval system) requires written permission. To request permission, use our Web site ( call or Toll-free: (US and Canada) International: Fax: Posting of full-text SMR articles on publicly accessible Internet sites is prohibited. To obtain permission to post articles on secure and/or password-protected intranet sites, your request to Customer Service MIT Sloan Management Review PO Box North Hollywood, CA 91615

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